Amicus: Bullish Options Trade Into Clinical Trial Catalysts

Contributor Tony Pelz offers an options trade for those who believe Amicus shares are going higher.

NEW YORK ( TheStreet) -- Amicus Therapeutics ( FOLD) has several phase II and phase III clinical trial catalysts over the next months that, if positive, could provide fuel for fairly large share-price appreciation on top of the 70% gains already seen in the stock year-to-date. Adam Feuerstein wrote a preview of the Amigal phase III monotherapy trial in Fabry disease last Friday.

Options currently imply a $2.50 move in the shares -- $8.30 on the upside, $3.30 on the downside. An interesting, near-term, bullish trade with good risk reward is the following:

This is a JAN expiration Call Butterfly (long.) Total risk is defined and equal to $2,500 and occurs if Amicus shares trades below $5 and above $10 by Jan. 19 expiration. The trade breaks even at $5.25 per share and $9.75 per share. Maximum return is $22,500 if Amicus shares hit $7.50 by expiration, which represents a risk/reward of 9 times.

Tony Pelz was a trader on a major European bank's proprietary trading desk, responsible for a portfolio with limits of more than $200 million. Prior to proprietary trading, Pelz worked with several global investment banks in roles ranging from corporate finance, M&A to credit and business development. He is author of The Biotech Trader Handbook, 2nd Edition, co-founder of the small-cap biotech research and trading site Chimera Research Group and operator of PelzOptions.com. Pelz currently resides in Denver, Colorado where he trades for his own account.